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I’ve never been a verbose writer. I took a high level Shakespeare class during my last semester in college and the professor wrote on my final paper - “You understand quickly, you write even quicker.” I asked him what his comments meant and he said, when you write, you get right to the point.

Here’s my view of what happened to the mortgage industry. (If you want a more verbose, simply google Mortgage Collapse.)

The subprime mortgage world has fallen flat on its face. Loaning money to people who have proven that they can’t pay back a credit card let alone a mortgage was bad business. These loans started off with a 2 year introductory rate and now we’re seeing those two years expiring and now we’re getting into the adjustment phase. The mortgage entities that bought these loans are filing bankruptcy en masse. As as a result, borrowers who need these loans can’t get them anymore. The effects of these loans are moving up the risk ladder with “ALT-A” companies (the risk level between PRIME and SUBPRIME) starting to close their doors as well. It’s a mess right now and it may take years for all this to get straightened out.

Here are two videos worth watching regarding the mortgage mess:

Jim Cramer (rather calm):

Jim Cramer (going ballistic):

Completing a loan application is the first thing you’ll do when refinancing your mortgage. You may also need to provide a variety of documentation to help your mortgage lender approve you for a home loan. The documentation will vary depending on the lender you choose, your loan program, and your personal financial situation.

It’s also handy to have available your latest mortgage payment coupon, your mortgage note, and any payment coupons for credit cards you are paying off.

The extent of the documentation you will need to provide to your mortgage broker to get approved for a loan will depend on the type of loan you and your mortgage broker decide to use. Your mortgage broker will help you decide what amount of documentation will best fit your financial situation. Common types of documentation are Full Doc, Alt or Light Doc, Stated Doc, and No Doc. Full Doc is exactly what it sounds like you will need to provide full documentation of your income assets, etc. Alt Doc or light doc is an alternative to Full doc where rather than providing pay stubs and/or W-2s bank statements can be used to show income. Stated Doc is when as the borrower you tell the broker what your income is and do not provide additional documentation. The income must be with in reason for your type of employment and job title. For example you can not be a part time dish washer making 100K per year. No Doc is when no documentation is provided for your employment assets, etc. As the amount of documentation decreases the Lenders take on additional risk. With the additional risk the lenders become more stringent on other qualifying factors such as credit. Rates also increase with the increased risk to the Lender.

The following is a list of documents generally required when applying to refinance. You may or may not need them all, but for a fast and easy loan process, have these items available when you’re ready to complete your mortgage application. * Proof of income Typically, you’ll need to show original pay stubs for the last 30 days. * Copy of homeowners insurance Verifies that you have current and sufficient coverage on your home. * Copies of your W2 forms Required for each loan applicant and helps your lender verify past employment and income history. * Copies of asset information Including accounts holding money for closing costs, statements for savings, checking and 401K accounts and investment records for mutual funds or stocks. * Copy of title insurance Helps your mortgage lender verify the taxes, names on the title and legal description of the property.

When it comes to re-finance, it is often a good idea to consult a mortgage professional to identify a loan program that would achieve what is intended to accomplish. In addition, whether a refinance makes good economic sense also depends on the anticipated costs of the refinance transaction, which only a mortgage loan officer can provide.

Contact a mortgage professional for a complete listing of documents which you may be required to produce specifically for your state, county and loan program.

Documentation that may be needed for a refinance may include: Last 2 Years W-2’sLast 2 pay stubs Last 3 months statements for all asset accounts to include but not limited to: checking, savings, money market, 401K, stocks, etc. (must provide all pages for each account)Bankruptcy paperwork (all pages of filing and discharge)Divorce Decree (all pages of the Decree/Judgment and any attachments.)Social Security/Pension award letters Proof of 3 months receipt of child support/alimony Satisfaction of any liens, judgments and/or collections that have been paid Property tax bill Warranty Deed Mortgage Note Owner’s Title Insurance Policy Prior survey Clear copy of your Driver’s License or State issued ID and Resident Alien/Green Card

Cash-out refinancing is often used for home improvements or to consolidate high interest debt.

In addition you may need your HUD (closing statement) from the closing when you last purchased or refinanced the house. This depends on what type of loan program you are choosing, usually in cash out refinance situations.

There are two types of refinances:- Rate/Term, where you reduce your rate, payment or term (ex: 30 year fixed to a 15 year fixed)- Cash-Out, take out more equity on your property

After your bankruptcy is discharged your credit score will fall dramatically. There are however ways to rebuild credit and increase your score quite easily. One of the best methods is a secured credit card. These cards are fairly easy to obtain and are available through most major banks. Rent to own centers often report to the credit companies and are another great way to rebuild your credit. Just be sure to keep the payments manageable to avoid repeating the financial problems you are trying to recover from!

When rebuilding your credit after a bankruptcy it is extremely important to make all of your payments on time. Any adverse payments on a bankruptcy will limit your options on obtaining a mortgage.

If you are in a bankruptcy or have been recently discharged, you may still be eligible to refinance your home. Your mortgage broker will have programs that can fit your needs. Whether its taking a little cash-out, or simply paying off some items not covered in the bankruptcy, it is a good idea to refinance to get you back on your feet.

Many of our customers rebuild their credit by using their home equity to refinance and take cash out to consolidate debts and pay off all of their old bills, giving them a lower total monthly obligation which they can pay consistently every month. It is a fresh start for customers who are coming out of a bankruptcy, and paying a mortgage on time month after month is a great way to improve their credit score.

Make sure that all of your paid off credit cards are closed out. You should give your credit card companies written request to close your accounts. Open credit lines with a zero balance (especially if you have many) can potentially hurt your credit rating. Only keep the cards you use regularly and the ones you have had the longest.

You should check your credit report three to six months after the bankruptcy discharge and make sure the discharged accounts are being reported as “discharged in bankruptcy”. Oftentimes, creditors report the discharged accounts as charge off, collections, open unpaid or other such ways which will have a more detrimental effect on your credit score. It is very important that you keep all bankruptcy papers, especially the list of discharged creditors.

If you have not filed your bankruptcy yet, be sure to consider carrying some liabilities through the BK (i.e. do not include them in the bankruptcy). This can dramatically influence your ability to re-establish credit following the filing, but is not always available.

There are five major types of information used to calculate a FICO score and they are listed below. Each type of information counts as a percentage of a total FICO score and the calculations may vary a bit from each credit agency. This is a good rule of thumb to follow: - 35% Payment History - 30% Amounts Owed - 15% Length of Credit History - 10% New Credit - 10% Types of credit

Using credit is a proven way to re-build credit after bankruptcy. If you cannot get a credit card, apply for credit from department/drug stores and gasoline companies for expenses that you normally pay cash for. Also apply for a debit card, which you need to first deposit funds. You may also want to have a relative co-sign your credit application to ensure approval. Most important of all, once you are extended credit, be certain to make payments on time.

Once your bankruptcy has been discharged your credit will need to be cleaned up. Keep copies of all bankruptcy documents and attain documents from each creditor (credit cards and collection agencies) that indicate that the debt was removed via bankruptcy.

There are many lenders in today’s market that can help a person who had some event that caused them to either file bankruptcy or get behind on the bills. These lenders are called subprime lenders and many have really aggressive programs.

Consider using a 401k loan, or withdrawal, in order to come up with a good sized down payment on a home to help you qualify for a loan with less than perfect credit or even very bad credit. Many times you can get away without being penalized by the IRS if you use a 401k withdrawal for a down payment for the purchase of your first house.

If you have consulted with your mortgage professional and are still having trouble buying a home with poor credit, consider looking into buying a house through a land contract. With a land contract you buy the home from the seller, however the seller retains the mortgage loan and you agree to make monthly payments of a certain amount to them for a certain period of time. You do not take title to the property until you obtain your own financing on the property.

An important part of getting a mortgage with less than perfect credit is to make sure that you are paying your rent on time and by a check. This will show the lender that you have the ability to pay as some mortgages are based solely off of the rent history.

A lot of times credit issues can be resolved fairly quickly with systems that lenders use like “Rapid Rescoring”.

Some loan programs will allow you to purchase or refinance one day out of bankruptcy (some up to 100% loan to value) and others will allow a bankruptcy buy out to refinance (Chapter 13). If you are looking to do a bankruptcy buy out, you must first get permission from the bankruptcy judge and make sure your payments on the plan have been current for at least 12 months. By rolling the bankruptcy into your mortgage debt you could save hundreds every month. It is also a good idea to think about debt consolidation before filing for bankruptcy. It could save you money and not hurt your credit like a bankruptcy will.

You may want to consider professional credit improvement programs, which can boost credit scores to qualify for bad credit mortgage programs

Banks evaluate the credit worthiness of a loan application by three major criteria, credit, income, and assets. Potential home buyers with bad credit profiles should scrutinize their other two aspects. A mortgage applicant with poor credit can most likely get home financing if his income is proved to be sufficient to repay the loan and his other debts, and if he has ample assets as reserves after making a large down payment towards the house.

When considering getting a mortgage with poor credit it is often important to employ a long term strategy. One such strategy might be to take a two year fixed subprime loan and pay off consumer debts through the loan. With the debts paid off and better monthly cash flow the borrower should have a much better credit score two years down the line. At that time the borrower can refinance into a more permanent financing program such as a thirty year fixed.

The best way to get a Mortgage with poor credit, is a large down payment. The more money you put down, the easier it will be to get a mortgage. But even if you can not afford a large down payment, there are loan programs for people with poor credit and there are also down payment assistance programs.

There are many sub-prime and niche lenders available to people with poor credit. These lenders have very aggressive programs available to help almost any borrower. There are even programs available for 100% financing. A qualified mortgage professional will be able to find you the best lender to fit your particular situation.

A legal process in which mortgaged property is sold to pay the loan of the defaulting borrower.

Before a Foreclosure proceeding, a Notice of Default (NOD) must be sent out to the homeowner. It notifies the homeowner that unless back payments are brought current within a time frame (at least 30 days), the bank would initiate a Foreclosure process. Foreclosure begins with the filing of the Notice of Trustee Sale (NTS), which states when and where the property is to be sold. By law, the foreclosure sale must be advertised on newspapers several times before the scheduled sale. The NTS is sent to the homeowner, alerting him that the property is now in foreclosure. The NTS also itemizes the amount owed, plus attorney fees and other charges.

Foreclosure is legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms and conditions in the mortgage contract. The foreclosure procedure brings the rights and obligations of all parties to a final conclusion and passes the title in the mortgaged property to either the holder of the mortgage or a third party who has the option to purchase the property at the foreclosure sale. At this point the property is free of all the past encumbrances affecting the property subsequent to the mortgage.

When a Notice of Foreclosure is served, a homeowner has basically three options. Bankruptcy- Filing bankruptcy delays the mortgage repayment. It does not eliminate the debt. Therefore, it is only a temporary measure. Sell the property- While selling the home and pay off the mortgage effectively eliminates the debt, in a soft real estate market, the homeowner may have to sell the property at a distressed price to keep within the timeframe of the foreclosure proceeding. Refinance- The homeowner can also refinance and pay off the current mortgage. As long as the homeowner has enough equity built in the home, many lenders are willing to finance the property to help the owner out of foreclosure. The last two methods would save the homeowner’s credit ratings. After the homeowner has a chance to attend to his financial matters, he can purchase another home when he feels ready.

Depending on the state the property is in and thereby the types of security instruments, Mortgage or Deeds of Trusts, the lender may or may not have to go to court to foreclose upon the property. In state where trust deeds are used, because titles to properties are held by the lenders, lenders do not have to go through court proceedings to foreclose on properties. In states where mortgages are used as security instruments, banks must go through court proceedings.

The foreclosure process is not immediate. If your house is in foreclosure, you do have options. Call us today for free information.

A legal process to enforce a lien, by the selling of property, to satisfy the debt.

It is important to know that foreclosure is not automatic. Due to the high cost of foreclosure to lenders some of them will try to work with you to find other options especially if they feel you can provide a valid solution to the problem.

This will usually happen when you are three or more months late on your mortgage

Not only does your mortgage company holding the note on your property have the right to foreclose but also your taxing authority may do the same. If you do not pay your property taxes then the taxing authority can foreclose. If this happens there is usually a redemption period which allows your to pay the debt along with fees and interest. Different states will have different methods for this process. One way is to sell what they call a tax certificate then after a set time period the investor who bought the certificate will get the deed to the property. The other way is where the investor acquires the deed at the auction but will not be able to sell the property until after the redemption period.

There are different options to get out of foreclosure. Refinance your mortgage or a lease buyback program. Typically you will need at least 25% equity to refinance out of foreclosure and sometimes more depending on your credit scores. Or a private investor can buy your home from you and lease it back to you for a set period of time. In that time you are to get your credit to the point where you can purchase the home back from the investor.

If for any reason you are having difficulties or problems making your monthly mortgage payments, call, write or otherwise contact your mortgage company as soon as possible. Your lender wants to help you avoid foreclosure, so explain your situation clearly and honestly. Have your key and actual financial information ready, such as your income and expenses as well, as this information may be necessary for the lender to offer you assistance.

When faced with letters from your lender, it is important not to ignore letters notifying you of late payments, default, or otherwise describing delinquency on your mortgage payments.

A FICO score is a number that rates a borrowers credit record. The score is based on a number of factors, including how well debts have been paid off, current levels of debt, types of credit, and length of credit history. Scores generally range from 350 to 900.

However if you are applying for a very aggressive loan, like a pay option arm, or responding to a promotion for excellent credit borrowers, multiple recent mortgage lateness’s will make it very challenging for us to get you a loan with the terms you are expecting. More than your improving your FICO score on your credit report, working to remove lates through credit repair will help ensure you get the home mortgage refinance or buy new home mortgage you deserve.

If there is incorrect information on your credit report such as a payment that was reported late that should not have we will be able to correct the information within 3-5 days by going directly through the 3 major credit bureaus and get a rescore to reflect what your credit score should be.

Credit scoring has been utilized by lenders for over 30 years. Credit scoring is a technology used by credit grantors to qualify the risk associated with extending credit to a given borrower. Risk is quantified by means of a score card which calculates a numeric value, or score, for a credit applicant a lender wants to evaluate. Score calculation is done based on information that has been determined to be indicative of future credit performance. There are many types of scoring methods currently utilized today including credit scoring, applicant scoring, behavioral scoring and several others. The type most relevant to the mortgage industry is credit scoring and among the most widely recognized is the FICO SCORE.

You should periodically review your FICO score and see if there is anything you can do to improve your score.

The are five main categories of information that the FICO score evaluates:1. Credit Payment History: 35% 2. Credit Balances: 30%3. Credit History: 15%4. Credit Inquiries: 10%5. Credit Types: 10%

Credit Payment History: 35%At 35% Credit Payment History weighs the most. While events such as a bankruptcy, foreclosure or tax liens will have the greatest negative impact on your score, multiple and/or recent late payments have a tremendous impact as well.

A new law allows borrowers to receive a free copy of your credit report from each of the credit reporting agencies every year. Visit www.annualcreditreport.com

The Fair, Isaac Corporation,(FICO) developed the formula for credit scoring. In general, the higher the score, the more creditworthy a borrower is in the eyes of the lender. A score of at least 680 indicates the borrower is very creditworthy.

Credit Balances: 30%What is your credit balance to your credit limit? The Outstanding Credit Balance ratio has the second highest weight on your credit score. High balances on your credit cards can be viewed as a red flag since it’s an indication that you may be overextended. If you have multiple credit cards, you may want to spread the wealth to keep the credit balances to credit limit ratio low.

Credit Inquiries: 10%Opening a new credit account doesn’t harm your credit score dramatically especially after you make the first payment. However, credit inquiries can negatively impact your score. Generating many credit inquiries exudes that you are trying to secure a large amount of credit or you are being turned down by lenders and have to apply elsewhere.

FICO score is one scoring system used by Experian, a credit profiling company. Two other companies have similar scoring systems that are just as widely accepted by lending banks. Together with Experian’s FICO score, credit reports that contain Trans Union’s Empirical score and Equifax’s Beacon score are often referred to as the Tri-Merge Report.

To keep a healthy or high FICO score you will need to at the very least do these 3 things:1 - Keep your balances on your credit cards to 50% of what your limit is2 - Always pay your bills on time - if you have to hold a bill and pay late make sure it’s not more than 30 days to post. 30 day lates really bring your credit scores down 3 - Try not to cancel cards you have had for a long time. Length of time on accounts plays a part into the scoring

For more information on how credit scores are developed, please visit: air, Isaac and Company (FICO)www.fairisaac.com200 Smith Ranch Road San Rafael, CA 94903ph: (415) 472-2211

There are many credit fixing agencies that will help raise fico scores for a potential borrower so they can put themselves in an overall better position for obtaining a loan. If your fico scores are low, there are still plenty of things that can be done to help bring scores up. Sometimes it takes little time and sometimes it takes longer but in the end the results can be fantastic.

Credit History: 15%Credit History is a reflection the length of time that you’ve had accounts open. You’re rewarded for keeping long term debt. Older credit accounts that have been used more frequently will have more weight than those that are newly opened or used with less frequency.

Most lending institutions categorize scores in to ranges. Generally scores above 800 are considered excellent, scores from 700-799 are considered good, scores from 600-699 are average, scores from 500-599 are considered poor, for scores below 500 there are very few lending options available. There are many lenders and each has their own guidelines for qualifying borrowers.

Credit Types: 10%This percentage of your FICO score is based on your mix of credit. Do you have a good mix of credit cards, retail accounts, installment loans, finance company accounts or mortgage loans? It looks at the whole picture and totals how much of each type of account that you have.

In the early 1980s the three major credit bureaus, Experian, Equifax and Trans Union all worked with the Fair, Isaac company to develop generic scoring models that allow each bureau to offer a score based solely on the contents of the credit bureau’s data about an individual. Creditors-especially those in the mortgage industry-frequently use the scores when deciding who receives loans. They can order your score, commonly called a FICO score, from one of the bureaus, but it only draws upon information from your credit report. Individual creditors often also consider other information, such as your salary or how long you have been employed at the same company when making loan decisions.

Your mortgage broker will be happy to review your FICO score and your complete credit report with you in detail, which is often a much better alternative to struggling to make sense of the abbreviated reports delivered by free credit report websites. Ask your mortgage professional for more information about this important subject.

Most people do not have perfect credit. Most people have FICO scores ranging from the low 600s to the high 700s. Mortgage applications typically are not rejected because of a few late payments.

Credit counseling in lieu of filing bankruptcy has help many Americans out financial issues. Today, there are lenders who are comfortable lending money with a borrower currently in consumer credit counseling as long as the consumer has been on time with the monthly payments.

Many lenders look at credit counseling the same as bankruptcy or just barely a step above bankruptcy. Credit counseling is not always the best route to go to take care of credit card debt. Ask your mortgage professional if there are any options or other ways to deal with your debt first. A debt consolidation refinance can many times save you hundreds and sometimes even thousands of dollars.

If you are considering credit counseling, please speak to a mortgage consultant first if you plan on purchasing or refinancing a home. Entering credit counseling may limit the number of lenders willing to lend to you.

Other sites: Mortgage Broker | MIP | Why choose a mortgage Broker| Pay Option Arm Calculator

Editors Note: Due to the mortgage and credit crunch, mortgages after bankruptcy are difficult to obtain. If you’re in need of a Mortgage in the Denver area contact us to discuss your mortgage options.

Often time’s people are so far in debt that they can never repay their debt. At this point the best solution may be to file a Chapter 7 Bankruptcy. A Chapter 7 is very detrimental to your credit rating, but you are typically out of Bankruptcy in 6 months and you don’t have to repay any debt. However the disadvantage is that this will show up on your credit report for 10 years from the date of filing your BK. With creditors starting to tighten their credit requirements, and you will be limited to certain types financing.

Although Chapter 7 bankruptcy will severely damage your credit rating, you need to determine what’s worse - killing your credit with constant late payments and high debt, or by filing chapter 7 bankruptcy and getting rid of your debt.

Many consumers can still obtain home loans after a chapter 7 discharge.

Chapter 7 bankruptcy isn’t intended to let you rack up debt and then get out of it without having to repay anything. It is there as an option to give you a fresh start. Unfortunately, many people don’t see it that way, and get trapped in the cycle of racking up debt and then filing for bankruptcy. However, you can only file once every 7 years, so be sure that if this is your only option, you use it as a stepping stone to move on to a better financial future.

Other sites: Loan Officer | 1003 The Loan Application | What not to do after you apply for a Mortgage| Pay Option Arm Calculator

This can be summed up in one word - Yes. Aggressive programs from aggressive lenders makes money available for people who have filed a BK.

A bankruptcy does not exclude you from getting a mortgage. It simply means you are a higher risk to the lender. Your rate may be higher, the fees a bit higher but the mortgage can still be obtained.

You will often want to plan a two step strategy when refinancing out of bankruptcy. Refinance once now to get your affairs in order, pay off debts, lower your overall monthly expenses, and help you rebuild your credit, and then a second refinance in two to three years to take advantage of your new credit score and any additional equity in your home you may have built or gained through appreciation.

It is also possible to refinance while you are currently in a chapter 13 bankruptcy. You will have to get permission from the bankruptcy court and show that you have made payments into the plan on time for at least 12 months. Keep in mind that the maximum loan to value on these types of loans are typically from 70%-80% depending on the lender.

To offset some of the higher rates that you may get after filing a bankruptcy you may choose to go with a short term arm such as a 2/28 or 3/27 where the payment is fixed for 2-3 years and at that point you can come back and refinance into a program that better fits your needs.

The type of bankruptcy that was filed will be the first determining aspect in deciding what type of mortgage financing you qualify for.

There are many programs that allow up to 100% financing 1 day out of a bankruptcy. Of course your credit score needs to be able to support this also. Basically if you have managed to straighten out your credit since the bankruptcy it is possible to have a decent credit score by the time your bankruptcy is paid off.

Getting a home loan after bankruptcy is not too difficult with sub-prime lenders, although the borrower should expect to pay a higher interest rate. Because of the high bankruptcy mortgage interest rates, when choosing different types of bankruptcy home loans, potential borrowers should expect to refinance the mortgages to lower interest rates after they have a chance to rebuild their credit in a couple of years.

Your chances for home financing will increase if you carried some accounts through the bankruptcy. Some lenders will also use your cancelled rent checks for a trade line.

On a chapter 7 bankruptcy lenders usually look at the discharge date and not the file date. On a chapter 13, a lender may look at the file date unless the chapter 13 has been dismissed. Your mortgage broker will be able to get the best lender for your particular situation.

Here’s an article from the Rocky Mountain News regarding the onslaught of bankruptcy filings.

As new rules loom, debtors in single day file 433 fresh cases

By John Accola, Rocky Mountain News
October 4, 2005

Record day, record month, record year.

A stampede of debt-laden consumers on the last day of the month broke the charts Friday in Denver’s U.S. Bankruptcy Court.

Bankruptcy Clerk Brad Bolton said Sept. 30 marked the court’s largest number of filers in a single day - 433 fresh cases - and also exceeded previous record highs for the month and year.

“It’s the No. 1 day of all time here, and I bet it won’t last a week,” Bolton said.

Bolton said he expects the figures to keep climbing as debtors rush to file before a new and stricter bankruptcy law takes effect Oct. 17.

This year, with three months remaining, Colorado filings totaled 28,093 on Friday. That compares with 27,993 filings for all of 2004.

For the month, September showed 5,432 filings, a 131 percent jump over September 2004.

Overall, bankruptcies are up 31.2 percent from a year earlier.

To declare bankruptcy, consumers whose debts total more than their net worth must also show that living expenses and monthly bills exceed their income.

The new bankruptcy law, however, will make it more difficult - and expensive - to go through the bankruptcy process, with higher bankruptcy filing fees and added requirements, such as mandatory credit counseling and debt education.

The extra legal hoops are designed in part to steer people away from Chapter 7 bankruptcy, where most debts can be wiped out entirely, to a less forgiving Chapter 13. In a Chapter 13, the bankruptcy court requires debtors to set up a plan to repay a percentage of their debts over five years.

An income “means test” presumably will prevent debtors with above-average incomes from filing a Chapter 7. In Colorado, a couple whose income exceeds $54,187 would likely have to file Chapter 13, according to the new rules.

Josh Stritecky, an attorney at Methner & Associates in Denver, was in bankruptcy court recently lugging a bag overloaded with bankruptcy files. Stritecky said he and his colleagues have been working seven days a week to keep up with the flurry of cases.

“It’s been crazy,” he said.

He said credit-card debt is just part of the picture. A lot of the cases involve job loss, huge unforeseen medical bills and divorce.

One woman, a legal assistant in Denver who makes about $50,000 a year, said she wouldn’t qualify for Chapter 7 after mid-October. She declined to provide her name for this story because she feared her career would be affected by the stigma associated with bankruptcy. She was faced with repaying about $15,000 in credit-card debt, $10,000 for a student loan and two mortgages totaling roughly $125,000, according to her filing. She only had $50 in her checking account and $50 cash, according to the filing, made in August. She said she believed she would never fully pay off her debts.

“I just couldn’t cut it,” she said. “I’ll never take out a loan for anything again in my life.”

The law also takes aim at business bankruptcies. Denver attorney Brent Cohen, a commercial bankruptcy specialist, said retailers filing for bankruptcy - either to reorganize or to liquidate - could have a harder time keeping store leases.

Cohen said the new law favors commercial landlords, in some cases allowing them to break their rental agreements with a bankrupt tenant. Current law allows bankrupt businesses to sell those leases as an asset and even remain on the premises for years until a reorganization plan is approved.

Tighter deadlines will give business tenants fewer breaks.

“If you have a landlord resisting the debtor’s efforts . . . and the debtor needs additional time to organize, that can be a very difficult deadline to live with,” Cohen said.

accolaj@RockyMountainNews.com or 303-892-2666.

Copyright 2005, Rocky Mountain News. All Rights Reserved.

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